Monthly Interest on a ₹2 Lakh Fixed Deposit

When investing in an FD, issuers offer various interest payout intervals, such as monthly, quarterly, and annual payouts. On choosing a monthly interest payout option, you will receive monthly returns that you could use to pay off certain expenses.

 

To understand this better, here is an example. If you earn 7% interest on a fixed deposit of ₹2 Lakhs for a tenure of 5 years, you can get monthly interest of approximately ₹1,166 generating ₹80,510 as total interest amount. Similarly, for a 3-year tenure at a 7% interest rate, a ₹2 Lakh FD will generate ₹1,166 in monthly interest, but in this case the total interest earned will be ₹45,000. As observed, the total interest income decreases when a shorter tenure is selected.

 

Hence, before you invest, compare your returns across different rates, tenures, and issuers to choose the one that offers the most lucrative earnings.

This table shows an estimate of the monthly interest on ₹2 Lakhs in bank FDs over a tenure of 5 years: 

Check the rates offered and the monthly payouts you may receive for a ₹2 Lakh FD for 5 years in 2024:

The table below outlines the maturity amounts for a ₹2 Lakh FD at an interest rate of 7.75% p.a., along with details for various tenures.

The interest you earn will be taxed if it exceeds the limits mentioned. Banks and NBFCs will deduct TDS from your interest on a fixed deposit of ₹2 Lakhs as per the following conditions:

• TDS is applicable if the monthly interest payout exceeds ₹40,000 for a regular citizen

• TDS is deducted at ₹50,000 for senior citizens

• TDS is deducted at 10% if PAN details are furnished and 20% if not

 

By using an online FD interest calculator, you can compute the interest on an FD of ₹2 Lakhs for 1 year and other tenures. Input these details into the tool:

• Principal amount

 

• Investment tenure

• Interest rate

Maturity Amount Calculation Example

Assume you invest ₹20 Lakhs in a fixed deposit at an interest rate of 7.50% p.a. for a tenure of 5 years (60 months).

• Monthly Interest Earned = ₹2,00,000 × 6.70% / 12

• Monthly Interest Earned = ₹13,400 / 12

• Monthly Interest Earned = ₹1,116.67

 

The monthly interest earned on a ₹2 Lakh FD at 6.70% p.a. would be ₹1,116.67

 

Total Interest Earned Upon Maturity

• Total Interest = Monthly Interest × Number of Months

• Total Interest = ₹1,116.67 × 36

• Total Interest = ₹40,200.12

 

The total interest earned over the 3-year tenure would be ₹40,200, with a monthly payout of ₹1,116.67

 

Note: Check the formula used by the bank or NBFC to get an accurate estimate. 

Premature withdrawal of a fixed deposit allows you to access your funds before the maturity date, but it typically comes with penalties. Banks and NBFCs may reduce the interest rate from the originally agreed-upon rate and charge a small penalty fee. These factors combined can significantly lower your overall returns.

FD Premature Withdrawal Example

You invest ₹2 Lakhs in a fixed deposit at an interest rate of 8% p.a. for a 2-year tenure. However, you decide to withdraw prematurely after 1 year and the interest rate for the 1-year period is 7.20% p.a. After applying a 1% penalty for early withdrawal, the final interest rate would be reduced to 6.20% p.a., leading to lower returns than initially expected.

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.